Two years into our product journey for Freshchat, an in-app messenger, we faced with two seemingly fundamental problems—problems we’d assumed we were too mature for:
By this time, we had added our share of marquee clients and thought that customer addition and retention would grow exponentially beyond this stage. We knew we had done something right—we had a product our existing customers liked—but we were simply not able to fast-track our sales journey.
Looking back at our approach, it is clear now that we were still in evangelist mode, expecting our customers to buy into our grand vision. We underestimated how big a leap of faith this was for them; it wasn't just a contract for them. It was a whole new way of working. Merely talking about features and functionalities and expecting recurring sales was both overly simplistic and optimistic. We knew that we could solve this problem if customers didn’t have just to perceive value and help them see tangible ROI for their business.
We decided to go back to our existing customers to find ROI that we could showcase. It was much harder than we’d thought. There simply was no ‘pre’ state to look and compare against. While we couldn’t go back and change that, we decided that from then on, to each new customer, we needed to be able to show how we've added value and exactly how much.
Towards that end, some of the things we wanted to do were:
And most importantly,
Our conversations with our clients through onboarding, go-live, and implementation made one thing very obvious: the #1 reason for enterprise customer churn is that the customer fails to realize the promised value from the product.
Notice the use of the word "realize". It's not that the customer didn’t understand this potential value. That's why they bought our solution and went through implementation in the first place.
Then, why do customers not realize the promised value from the products they buy? Here are the most common reasons:
It was at this stage that we learned the importance of integrating value realization into our Customer Success framework to enable customers to:
The rest of our journey was focused on having a value-centric process in each step along the way, right from when the sale is happening and beyond the customer go-live. In the rest of this article, we take you through our lessons from our journey and share some tips to help you with yours.
To accelerate the customers’ time-to-value-realization (TTVR), you need to be very deliberate in designing your sales, onboarding, and customer success methodologies. It’s helpful to look at Value Realization in five steps:
You are selling value when you define the value your customer can derive from implementing your solution. The most important aspect is quantifying this value and having the customer buy into this value.
The best way to do this is by keeping the customer's key current problems in mind, focusing on the solution, and quantifying the value unlocked by solving those problems. It's important to work with your customer to define this value and get the relevant executives on the customer’s team to sign off on it.
Pro-tip: The best case is to model different levels of implementation and roll-out of your solution and how value is gained in those scenarios. Having such a model would allow you to showcase the value to the customer in different stages of the implementation, even before a complete rollout.
Delivery is not just about configuring and implementing your solution. You've delivered value only when the customer has adopted the solution—to whatever extent—which means it also involves training and supporting a go-live and adoption.
For large organizations, user adoption is not automatic. You may need to run internal programs to evangelize and get the users excited about using your solution. In other words, you need to "market" internally.
As part of our journey, we ran an experiment where we placed some banners at one of our customer office locations before our product was rolled out to them. It got people curious, excited, and finally, customers started feeling a special connection with our product. This taught us how important it was to look at delivery beyond just implementation—to also look at what we could do to drive adoption from our end proactively.
At this step, your solution is in use, and customers are reaping its benefits. The key difference between this step and value delivery is that the benefits are accruing to the business by now. This would mean the value derived is reflecting in key business metrics, or leading indicators are illustrating the benefit being driven by adopting your solution.
It’s important to note that value realization begins when even a small team or few individuals in a team start using your solution. However, the full value is realized only when adoption reaches the planned threshold. You can still model the value realized and showcase the value and the percentage rollout to help customers understand how value would be unlocked further - thereby pushing for more adoption.
This is the stage where the customer confirms the value and goes from being an adopter to being a champion. While the value can be confirmed in stages with your rollout, you may want a formal testimonial or case study with the customer when there's enough value to showcase an ROI that is attractive to your potential customer base.
If you truly agree with the customer on the benefits and values, then showcasing this value should be a win for the project sponsor and the customer champion on the customer side. Remember that it is also in the interest of the customer champion to show the rest of their organization that their work has had good positive outcomes and impact on the company.
We all know that the opportunities to expand and do more always exist with large customers. Additionally, if you have scoped your Phase 1 the right way, there will always be ways for you to deliver more value by expanding adoption (teams, features used, integrations, use cases, etc.), and helping the customer solve more problems, drive more efficiency, and unlock more benefits from your solution.
Getting the customer to the right value early, i.e., with low TTVR, helps customer success teams follow through on additional initiatives to drive more value with confidence and support from the customer. If you slipped up in your first delivery or failed to showcase value, it is unlikely that the customer will be as helpful in continuing the journey.
In the next article of this two-part series, we look at the frameworks, metrics, and tools that you can use to design and implement a winning Value Realization model for your enterprise business.